FIRST DIVISION

[G.R. No. 156746. July 23, 2014.]

GERARDO VILLANUEVA , petitioner, vs . ST. MARTIN OF TOURS

KILUSANG BAYAN SA PAGPAPAUTANG, INC. , respondent.

NOTICE

Sirs/Mesdames:

Please take notice that the Court, First Division, issued a Resolution dated July 23, 2014
which reads as follows:
"G.R. No. 156746 GERARDO VILLANUEVA, Petitioner, v. ST. MARTIN OF TOURS
KILUSANG BAYAN SA PAGPAPAUTANG, INC., Respondent.
This appeal is taken from the decision promulgated on March 25, 2002, 1 whereby the
Court of Appeals (CA) af rmed the judgment rendered on October 1, 1998 by the Regional
Trial Court (RTC), Branch 77, in Malolos, Bulacan 2 nding merit in the complaint for judicial
foreclosure filed by the respondent against the petitioner.
Antecedents
Petitioner Gerardo Villanueva (Villanueva) was a member of respondent St. Martin of Tours
Kilusang Bayan sa Pagpapautang, Inc., a corporation engaged in cooperative banking
activities (like accepting savings deposit and lending financial assistance).
On December 9, 1996, the respondent led a complaint for judicial foreclosure against
Villanueva pertinently alleging as follows:
3. THAT on November 28, 1994, defendant executed Deed of Chattel Mortgage on
one (1) motor vehicle, description of the said motor vehicle is hereto described as
follows:

Make & Type Isuzu Dropside

Motor No. 4BAI-552710
Chassis No. TLD54-9851865
Plate No. PJJ-142
Reg. Cert. No. 25873571

xxx xxx xxx

4. THAT the amount of ONE HUNDRED THIRTY FIVE THOUSAND PESOS

(P135,000.00) was loaned and evidenced in the said Deed of Chattel Mortgage;
5. THAT the condition of the said Chattel Mortgage is such that if within the
period stated from and after the execution of the same, defendant shall pay to the
plaintiff the amount stated therein plus the stipulated interest of SIXTEEN (16%)
per annum and the same mortgage shall be discharge, otherwise it shall remain in
full force and effect;
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 6. THAT in case of non-payment of such indebtedness of the defendant or a part
thereof remains unpaid the Chattel Mortgage contract shall be enforceable in the
manner prescribed by law or for foreclosure;

7. THAT of said amount of indebtedness, defendant have (sic) remitted nothing

thereby still indebted in its full amount of ONE HUNDRED THIRTY FIVE
THOUSAND PESOS (P135,000.00) exclusive of interest and other charges, which
amount defendant failed to pay despite demand made both oral and written, the
last of which was through its undersigned counsel by registered mail, copy of
which is hereto attached as Annex "D" the registry receipt as Annex "D-1" and the
return card as Annex "D-2"; DITEAc

8. THAT payment of said obligation is long now overdue but defendant have
failed and refused and still fail and refuse to pay the same or any part thereof,
notwithstanding repeated demands from plaintiff;

9. THAT by reason of defendant's unjusti ed refusal to satisfy plaintiff's plainly

valid, just and demandable claim, the latter was compelled to engage the services
of counsel and was obliged to pay the sum equivalent to 20% of the total amount
due, litigation and incidental expenses which defendant have (sic) expressly
agreed to pay under the terms of the promissory note, interests due thereon and
fines; 3

Villanueva led his answer with counterclaim, 4 in which he admitted the existence of the
loan as well as his execution of the deed of chattel mortgage, but raised the defenses of
lack of cause of action and prematurity of the ling of the complaint. He claimed therein
that he did not refuse to pay his obligation, for, in fact, he had tendered payment to the
respondent, but the latter's counsel made unreasonable demands for attorney's fees; that
the respondent and its former manager had verbally agreed on an out-of-court settlement
of the case; and that the dispute was not rst brought to a barangay mediation, in violation
of Republic Act No. 7160 (RA No. 7160), or the Local Government Code of 1991 .
In its reply, 5 the respondent reiterated that Villanueva did not settle his obligation; that the
parties did not enter into any compromise agreement; and that the provisions of RA No.
7160 did not apply to the respondent by virtue of its being a corporation.
Villanueva did not appear at the scheduled pre-trial conference despite notice. Hence, upon
the motion of its counsel, the respondent was allowed to present its evidence ex parte. 6
Decision of the RTC
On October 1, 1998, the RTC rendered its decision, disposing:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
a) Defendant is ordered to pay the plaintiff the following:

1) The sum of One Hundred Thirty Five Thousand Pesos (P135,000.00)

representing the total amount of indebtedness;

2) Interest at 16% per annum based on the principal from April 30, 1996
until full payment is made;

3) Fines at 2% per month based on the principal from April 30, 1996 until
full payment is made;

4) The sum equivalent to 10% of the total amount due as attorney's fees;
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 and

5) The costs of suit.

b) In case of default of such payment, the plaintiff as mortgagee, may cause the
motor vehicle subject matter of the Deed of Chattel Mortgage dated
November 28, 1994, particularly described as follows:

Make & Type Isuzu Dropside

Motor No. 4BAI-552710
Chassis No. TLD54-[0]851865 (sic)
Plate No. PJJ-142
Reg. Cert. No. 2587357[1]

to be sold at public auction by the Deputy Sheriff of this Branch in the manner
prescribed in Section 14 of Act No. 1508, as amended, otherwise known as
The Chattel Mortgage Law.

SO ORDERED. 7

Villanueva moved for reconsideration or new trial, 8 assailing for the first time the
respondent's lack of juridical personality and its capacity to sue, the absence of proof of
the existence from the deed of chattel mortgage.
On February 26, 1999, 9 the RTC denied Villanueva's motion for reconsideration or new
trial.
Judgment of the CA
Villanueva appealed, but on March 25, 2002, the CA promulgated its assailed decision, 10
viz.:
UPON THE VIEW WE TAKE OF THIS CASE, THUS , the judgment appealed
from must be, as it hereby is AFFIRMED , and the present appeal ordered
DISMISSED . Costs against appellant.

SO ORDERED . 11

Villanueva sought reconsideration, but the CA denied his motion for reconsideration on
January 14, 2003. 12
Issues
Hence, this appeal by petition for review on certiorari, with Villanueva positing as grounds
the following:
A. THE COURT OF APPEALS COMMITTED ERROR OF LAW IN EQUATING
JURIDICAL EXISTENCE TO AUTHORITY OF THE BOARD TO FILE THE
ACTION IN COURT OR IN EQUATING PETITIONER'S ADMISSION OF
JURIDICAL EXISTENCE OF THE RESPONDENT TO ADMISSION OF
AUTHORITY OF THE BOARD OF DIRECTORS TO FILE THE ACTION IN
COURT; HCSAIa

B. THE COURT OF APPEALS ERRED IN NOT HOLDING, THAT WITHOUT THE

PROMISSORY NOTE HAVING BEEN MARKED AND PRESENTED IN
EVIDENCE, THE CHATTEL MORTGAGE, HAS NO BINDING EFFECT, AND
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 THE AUCTION SALE OF THE MORTGAGED VEHICLE CANNOT BE
ALTERNATIVE TO BE HELD TO SATISFY THE JUDGMENT AMOUNT;

C. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT WITHOUT VALID

AND SUFFICIENT DEMAND, FIRST MADE ON THE PETITIONER, THE
ACTION IS PREMATURE. 13

The legal issues for resolution by the Court are, therefore: ( a ) whether or not the
respondent had the capacity to sue; and (b) whether or not the cause of action was
premature.
Ruling
The appeal lacks merit.
1.
Respondent had capacity to sue
In his answer with counterclaim, Villanueva raised only the following as defenses, namely:
(a) that the respondent had no cause of action because he had not refused to pay his
obligation; (b) that there had been a compromise agreement between the parties; and (c)
that the complaint was premature for failure to comply with the requirement of prior
barangay conciliation. It was only by his motion for reconsideration vis--vis the decision
of the RTC rendered on October 1, 1998 that he raised for the rst time the defense of lack
of cause of action premised on the respondent's lack of capacity to sue and the
prematurity of the complaint based on the absence of a provision in the deed of chattel
mortgage indicating the maturity of the obligation.
Villanueva's failure to raise in his answer the respondent's alleged lack of capacity to sue,
absence of the promissory note, and prematurity of the ling of the complaint for lack of a
de nite maturity date, was fatal to his cause as he is already deemed to have waived such
defenses. 14 Indeed, Rule 9, Section 1 of the Rules of Court provides that defenses and
objections not pleaded either in a motion to dismiss or in the answer are deemed waived.
Nonetheless, the records indicate that the grounds claimed by Villanueva were unfounded.
Villanueva contends that there was no board resolution that authorized Minerva R. Tamayo,
then Acting General Manager of the respondent and a signatory to the veri cation, to le
the complaint. 15 What was offered in evidence was the letter dated April 3, 1995 signed
by Rustico U. Galang, Jr. authorizing Elvira M. Nieto to appear and testify in all pending
cases involving the respondent. 16 Villanueva maintains that without the board resolution
the complaint should be dismissed considering that the respondent had not established
its capacity to sue. 17
The power of a corporation to sue and be sued is lodged in the Board of Directors, a body
that exercises the corporate powers. It necessarily follows that an individual corporate
of cer cannot solely exercise any corporate power pertaining to the corporation without
authority from the board of directors. Thus, the physical acts of the corporation, like the
signing of documents, can be performed only by natural persons duly authorized for the
purpose by corporate by-laws or by a specific act of the Board of Directors. 18
Worth reiterating, to begin with, is the CA's observation that Villanueva's admission of the
respondent's capacity to sue could not be negated by his belated attempt to assail such
fact in his motion for reconsideration, viz.:

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 The rst issue raised by herein appellant is clearly a desperate attempt by him to
shore up his tottering posture. After acknowledging that herein plaintiff-appellee
is a juridical person existing under the laws of the Philippines, appellant now
makes a 180-degree turn-around and impugns the appellee's juridical personality
and capacity to sue. It must be stressed here that the complaint of herein plaintiff-
appellee specifically avers the following, to wit SEAHID

"1. THAT plaintiff is a domestic corporation duly organized and existing

under and by virtue of the laws of the Philippines , with principal
of ce address at Poblacion, Bocaue, Bulacan, represented herein by its
Acting General Manager Minerva R. Tamayo, by virtue of a Board
Resolution, copy of which is hereto attached as Annex 'A' while defendant
(Maker) GERARDO VILLANUEVA of Villson's Comp., Bunlo, Bocaue,
Bulacan, Filipino citizen, of legal age, where he may be served with
summons and other Court processes;

"2. THAT plaintiff is engaged in cooperative banking activities such

as accepting savings deposit and lending financial assistance."

The aforementioned fact was admitted by appellant himself in his answer with
counterclaim, and was reiterated in his pre-trial Brief. Furthermore, the deed of
chattel mortgage itself explicitly stipulates that St. Martin of Tours Kilusang
Bayan sa Pagpapautang, Inc. (SMTKBPI) is a credit cooperative duly organized
and existing under and by virtue of the laws of the Philippines, with principal
place of business at Bocaue, Bulacan. Notably, appellant himself did not dispute
or challenge the existence of the said chattel mortgage. Suf ce it to state here
that a corporation, duly existing and organized under and by virtue of the laws of
the Philippines has a juridical or legal personality of its own, and as a
consequence, it can sue and be sued. Thus, the Board Resolution of appellee,
appointing its Collection Of cer and/or Credit Of cer and/or Accountant, Elvira
Nieto, as its duly authorized representative in the instant case, was presented and
remained uncontested by appellant. 19

Moreover, in Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue , 20 the

Court has clari ed who were the of cers of the corporation who could execute and sign
the veri cation and the certi cation on non-forum shopping without a board resolution, to
wit:
In a slew of cases, however, we have recognized the authority of some corporate
of cers to sign the veri cation and certi cation against forum shopping. In
Mactan-Cebu International Airport Authority v. CA , we recognized the authority of
a general manager or acting general manager to sign the veri cation and
certi cate against forum shopping; in P zer v. Galan , we upheld the validity of a
veri cation signed by an "employment specialist" who had not even presented
any proof of her authority to represent the company; in Novelty Philippines, Inc., v.
CA, we ruled that a personnel of cer who signed the petition but did not attach
the authority from the company is authorized to sign the veri cation and non-
forum shopping certi cate; and in Lepanto Consolidated Mining Company v.
WMC Resources International Pty. Ltd. (Lepanto), we ruled that the Chairperson of
the Board and President of the Company can sign the veri cation and certi cate
against non-forum shopping even without the submission of the board's
authorization.

In sum, we have held that the following of cials or employees of the

company can sign the veri cation and certi cation without need of a
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 board resolution: (1) the Chairperson of the Board of Directors, (2) the
President of a corporation, (3) the General Manager or Acting General
Manager, (4) Personnel Of cer, and (5) an Employment Specialist in a
labor case.

While the above cases do not provide a complete listing of authorized signatories
to the veri cation and certi cation required by the rules, the determination of the
suf ciency of the authority was done on a case to case basis. The rationale
applied in the foregoing cases is to justify the authority of corporate of cers or
representatives of the corporation to sign the veri cation or certi cate against
forum shopping, being "in a position to verify the truthfulness and correctness of
the allegations in the petition." (Emphasis supplied)
SIcEHC

Even if no board resolution showing the authority of Tamayo to sign the veri cation and
the certi cation in behalf of the respondent, a copy of the excerpts of the minutes of the
regular meeting of the Board of Directors attached to the complaint showed that she was
then the Acting General Manager and had then been designated by the Board of Directors
as the respondent's duly authorized representative. The excerpts read:
Inasmuch as the Acting General Manager, Minerva R. Tamayo, has appointed the
Collection Of cer and/or the Credit Of cer and/or the Accountant as the duly
authorized representatives of the Cooperative in all collection cases led before
the Municipal and Regional Trial Courts, this Board passed a new resolution to
formally delegate the authority given her, to wit:
B.O.D. RESOLUTION (Unnumbered)
Series of 1996
On a motion presented and duly seconded:
RESOLVED, AS IT IS HEREBY RESOLVED to appoint the Acting General Manager
as the duly authorized representative of the SMTKBPI in all pending collection
cases of the Cooperative led before the Regional Trial Courts in Malolos,
Bulacan and Municipal Trial Court in Bocaue, Bulacan except in cases where she
may authorize the Collection Of cer and/or the Credit Of cer and/or the
Accountant to represent, appear and testify before said courts at her discretion;
RESOLVED FINALLY THAT this resolution cancels and supersedes all previous
resolutions on the appointment of SMTKBPI's authorized representative in
collection cases filed in court. 21

2.
Although the promissory note was not offered
in evidence, Villanueva admitted that his obligation already
matured when the complaint was filed
The deed of chattel mortgage provides:
That as security for the payment of the loan or advance in the principal sum of
ONE HUNDRED THIRTY FIVE THOUSAND PESOS ONLY (P135,000.00), and such
other loans or advances already obtained, or still to be obtained by the
MORTGAGOR/S as MAKER/S from the MORTGAGEE, payable on the dates
mentioned in the corresponding promissory note, the MORTGAGOR/S hereby
transfer and convey by way of chattel mortgage, unto the MORTGAGEE, its
successors or assigns the following personal property or properties free from all
liens and/or encumbrances: . . . 22
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 Given that the deed of chattel mortgage made reference to a promissory note, Villanueva
argues that the presentation and marking of the promissory note as evidence were
indispensable to the determination of the maturity of his obligation; 23 that the deed of
chattel mortgage could not be considered as an accessory contract without the
promissory note being presented and admitted in evidence due to its being the best
evidence of the principal obligation; 24 that because his obligation had not been proved to
have matured, the ling of the complaint against him was premature, or, at least, the
complaint did not state a cause of action; and that the proper and suf cient demand was
not made by the respondent because the demand letter sent to him indicated the amount
of his obligation as P900,000.00, but such amount was not mentioned in the deed of
chattel mortgage. 25 ESCDHA

Villanueva's arguments are unworthy of consideration.

The issue on the existence of the promissory note and the maturity of the obligation, being
a question of fact, is not the proper subject of an appeal by petition for review on
certiorari. An issue is factual when the doubt or difference arises as to the truth or
falsehood of alleged facts, or when the query invites the calibration of the whole evidence,
considering mainly the credibility of witnesses, existence and relevancy of speci c
surrounding circumstances, their relation to each other and to the whole, and the
probabilities of the situation. 26
Moreover, the Court reiterates that it is bound by the factual ndings by the trial court.
Such ndings are nal when af rmed by the CA. 27 Hence, the Court cannot re-evaluate
evidence that the RTC and the CA had already passed upon. 28
At any rate, a promissory note, albeit proof of the obligation, is not the only means of
proof, for, like now, Villanueva himself admitted his obligation. 29 That was enough to
establish his personal liability, for, as the CA fittingly stressed:
There is no doubt or question that appellant received the sum of P135,000.00 as
the principal amount of loan. He even acknowledged the existence of the loan,
which was secured by a mortgage, and further claimed that he offered and tried
to settle his obligations to appellee. He cannot now disavow this obligation and
question its validity, claiming that the same cannot exist by itself in the absence
of a promissory note. The absence of such promissory note (if indeed there is no
such promissory note) does not nullify or invalidate the contract, as a promissory
note is only an evidence of indebtedness and does not indicate lack of
consideration of the mortgage. A contract of loan, being a consensual contract, is
perfected at the time of its execution; thus, appellant herein, having freely and
voluntarily executed the said contract, duly secured by a chattel mortgage, bound
himself not only to the ful llment of what has been expressly stipulated but also
to all the consequences which, according to their nature, may be in keeping with
good faith, usage and law. 30 EHaCID

Villanueva's indebtedness was further suf ciently established by the testimony of Nieto,
who was the respondent's account officer.
Contrary to Villanueva's insistence, his loan obligation matured at a de nite period, as
confirmed by Nieto, to wit:
Q: Now, will you please tell the Court how is the system or mode of payment of
this P135,000.00 secured as a chattel mortgage by Gerardo Villanueva?
A: The system or mode of payment is on a lump sum basis, sir.
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 Q: What do you mean by lump sum basis? How many payments will be made?
A: One payment.

Q: One payment?
A: If it is due and demandable.
Q: Now, in this document, it states that the payment should be made on . . . .
When will this mature, by the way, the P135,000.00?
A: The Chattel Mortgage is good for one (1) year and renewable each year.
Q: Was this renewed?
A: Yes, sir.

Q: When this was renewed, when is the latest maturity date of the document. . . of
the indebtedness?

A: The last maturity date of this document is on 1996 April.

Q: On April 1996, you said that the whole amount of P135,000.00 should be paid
in lump sum. Was there payment made on a lump sum basis on April of
1996?
A None, sir. 31

Even where no date of payment was indicated either in the promissory note or in the deed
of chattel mortgage, Villanueva's obligation under the law should be immediately
demandable. This is in accordance with the rst paragraph of Article 1179 of the Civil
Code:
Article 1179. Every obligation whose performance does not depend upon a future
or uncertain event, or upon a past event unknown to the parties, is demandable
at once .

Under the circumstances, Villanueva's obligation matured upon the demand for payment
by the respondent. As held in Wood Technology Corporation v. Equitable Banking
Corporation: 32
We note that this is a case for a sum of money, and petitioners have admitted
that they obtained the loan. They also admitted the due execution of the loan
documents and their receipt of the nal demand letter made by the respondent.
These documents were all attached to the Complaint. Petitioners merely claimed
that the obligation has not matured. Notably, based on the promissory note, the
RTC and the Court of Appeals found this defense not a factual issue for trial, the
loan being payable on demand. We are bound by this factual nding. This Court
is not a trier of facts.
When respondent made its demand, in our view, the obligation matured. We agree
with both the trial and the appellate courts that this matter proferred as a defense
could be resolved judiciously by plain resort to the stipulations in the promissory
note which was already before the trial court. A full-blown trial to determine the
date of maturity of the loan is not necessary. . . .

The relevance of the respondent's demand letter cannot be affected by the discrepancy
between the total amount stated in the letter and the amount subject of the complaint. It is
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 to be noted that the demand letter dated July 25, 1996 was offered in evidence to prove
that Villanueva had owed the total amount of P900,000.00, inclusive of the P135,000.00
that is now the subject matter of this case, and of other loans. 3 3 CAaDTH

WHEREFORE , the Court AFFI RM S the decision promulgated on March 25, 2002; and
ORDERS the petitioner to pay the costs of suit.
SO ORDERED."
Very truly yours,

(SGD.) EDGAR O. ARICHETA

Division Clerk of Court
Footnotes

1. Rollo, pp. 28-37; penned by Associate Justice Renato C. Dacudao, with Associate Justice
Ruben T. Reyes and Associate Justice Mariano C. Del Castillo (now a Member of this
Court) concurring.
2. Id. at 24-27.
3. Records, pp. 1-2.

4. Id. at 25-26.
5. Id. at 27.
6. Id. at 109.
7. Id. at 159-160.
8. Id. at 165-172.

9. Id. at 193.
10. Id. at 197.
11. Supra note 1, at 37.
12. Id. at 39.

13. Id. at 14-15.

14. Anunciacion v. Bocanegra, G.R. No. 152496, July 30, 2009, 594 SCRA 318, 329.
15. Rollo, p. 16.
16. Records, pp. 149, 156.
17. Rollo, p. 17.

18. Swedish Match Philippines, Inc. v. Treasurer of the City of Manila, G.R. No. 181277, July 3,
2013, 700 SCRA 428, 433-434.

19. Rollo, pp. 32-33.

20. G.R. No. 151413, February 13, 2008, 545 SCRA 10, 18-19.
21. Records, pp. 5-6.
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 22. Id. at 7.
23. Rollo, pp. 18-19.
24. Id. at 19.
25. Id. at 19-20.

26. Agner v. BPI Family Savings Bank, Inc., G.R. No. 182963, June 3, 2013, 697 SCRA 89, 93.
27. Dumayag v. People, G.R. No. 172778, November 26, 2012, 686 SCRA 347, 357-358.
28. Supra note 26.
29. Guinsatao v. Court of Appeals, G.R. No. 95083, February 9, 1993, 218 SCRA 708, 711-712.
30. Rollo, p. 34.

31. TSN of June 23, 1998, pp. 7-9.

32. G.R. No. 153867, February 17, 2005, 451 SCRA 724, 733.
33. Records, p. 148; see also TSN of June 23, 1998, p. 10.

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